Whilst the media is quick to name and shame individual benefit cheats, there is much less light cast on the corporate welfare frauds that often withdraw much more from our system daily. ‘Corporate Benefits’ is a new feature which looks at how companies (often with a little help from the government) irresponsibly abuse welfare policy and
scrounge profit from our benefits system.
In the first part of this new series, we look at the corporate benefits of workfare.
George Osborne announced at the Tory Party Conference in Manchester a couple of weeks ago that the Conservatives would introduce a ‘Work For The Dole’ policy for the long-term unemployed should they be elected in 2015.
Despite this announcement attracting a lot of media coverage, this concept is already in existence in the UK under several schemes, including the Work Programme, Mandatory Work Activity and Steps To Work to name a few. The schemes operate a form of workfare – increasing conditionality for benefit payments by requiring claimants to work up to 30 hours a week in work experience or other activity.
Interestingly, despite the government suggesting that this will help job-seekers, previous evidence demonstrates how these schemes are detrimental to workers, job-seekers and the taxpayer. In fact, there is only largely a benefit for companies.
What does the government say it will do?
The government says that workfare will help get people back into work by providing experience and mobilising job-seekers. Also, as part of a solution to the rhetoric the government themselves have pushed of ‘scroungers’ and ‘skivers,’ this will apparently end the ‘something for nothing’ culture.
What does the job-seeker get out of this?
The job-seeker is forced to work for survival. Sanctions are used to threaten workers to partake in the activity, which could actually hinder the job-seeker’s chance of working as previous reports have found, because this means that the job-seeker is working for free when they could be looking for paid work. There could be a premise for work at the placement following a period of 6 weeks or more, however, it is unlikely that there will be enough jobs to cater for those taking part, and instead, employers could simply use more workfare staff on forced programmes instead of paying someone.
What does the taxpayer get out of this?
The coalition would have us believe that the workfare programmes will lift the burden off the state by getting people back into work, whilst simultaneously making a show of pushing claimants into forced work. However, these schemes are damaging and costly to the taxpayer also.
Taxpayers who are in-work, particularly those on low-paid or entry level jobs could see their jobs threatened with the use of workfare staff. Boycott Workfare have noted cases where paid staff have been sent home and shifts have been covered with ‘free’ staff from these schemes. So this is actually threatening the availability and value of paid jobs.
Also, the benefit that is paid to the claimant for their 30 hour week is provided by the taxpayer who are now picking up the staffing bill, whilst large companies employing workfare schemes, save on these costs. So the taxpayer is directly paying for the profits of companies.
What does the company get out of this?
Following on from what the taxpayer loses, the company profits from the ‘free’ workforce – provided by the state, and forced to work on threat of sanction, as demonstrated in this experience posted on the comments section of the Guardian website:
“I personally know a fifty-six year old man who worked at Tesco for 40 hrs a week for 6 weeks for no pay. He said he was given the worst job, constantly filling freezers in the hope he would be taken on. After the 6 weeks were up the manager asked him if he would like to stay on for some extra weeks, my friend asked “with pay”? The manager said why would he pay him when he can pick the phone up and get more unemployed people who have to work for nothing of face sanctions meaning loss of ALL benefits for up to three years!
My friend wasn’t alone, he was part of twelve extra staff taken on to cover the xmas rush, no one was given a job at the end of the xmas period.
He told me they had all worked really hard and were gutted they were abused in such a way. The worst was one day he had to throw out lots of food one day over the use by date. He asked the manager if he could take some home as he was having to eat more due to being active all day. The manager refused saying if he gave him free food he wouldn’t come through the front door and buy it!
I swear I will never shop at Tesco ever again.”
Normalising free work
Whilst the government seem to aim this policy at the long-term unemployed, their previous workfare policies have started with the same sentiment and then quickly widened to include the majority of job-seekers. In this interview with Joanna from Boycott Workfare, we found that current workfare schemes now include the disabled and the young and you can be referred to these mandatory schemes from the first day of signing on.
Normalising these schemes for everybody is a huge threat to the value of work and the availability of paid jobs, and this benefits no one but the companies who able to exploit a free workforce. There are already some companies using similar schemes under the guise of ‘work experience’ but if entry level jobs become only attainable through months of prior free work then we risk eroding the minimum wage values and create further barriers to work for the unemployed and young people joining the labour market.
Whilst the government are taking a hard line on benefit claimants and increasing the conditionality of benefits, the irresponsible actions and abuses of welfare policy by companies goes seemingly unpunished. In fact, the government goes as far as to protect these companies by attempting to with-hold company names using workfare – allowing these abuses to continue. This is a protection that could be better afforded to the claimants and citizens who are made to feel ashamed and embarrassed for claiming their entitlement.
The government and media rhetoric on benefit claimants is one built on fear and suspicion and a smearing of character in order to push through more punishing policy. But our fear and suspicion would be better placed towards the groups benefitting from the workfare schemes, which are often used by companies not as way to help people back into paid employment, but a way to cut costs even further, and exploit claimants and policy for bigger profit.
But there seems to be no sanction for these companies. No threat from government and no media shaming for their irresponsible actions. Yet, these companies pose a much bigger threat to welfare, jobs, security and the value of work. Our benefits bill is much more at risk of growing with these corporate benefits. And companies have already shown their eagerness to take.
by Kam Sandhu – @KamBass